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Google’s Road to E-commerce

Google’s Road to E-commerce

BY Johnny 31 Oct,2020 Google Tokopedia

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Early in July this year, Temasek and Google were said to invest in Indonesia’s top e-commerce player, Tokopedia. 23rd. October, a number of mass media reported at the same time that Google invested $300 million in Tokopedia, which is in the same round with Temasek’s $500 million.

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This is not the first time that Google invested in e-commerce platforms of the emerging markets. It has invested in several e-commerce players around the world, and strengthened the construction of its own e-commerce ecology. And all of those moves show its ambition to enter into ecommerce market. In the past, Google could not find out the right way to fulfill its ambition, while it focuses its e-commerce business on its flagship product, YouTube. It aims at making YouTube an e-commerce platform.

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As the largest video website all over the world, YouTube began to ask its creators to use YouTube’s software to mark and track the products in their videos. And all those data will be linked to Google Analytics. In the future, videos in YouTube will become a huge catalog, and their audience are able to order all kinds of products in YouTube.

This is not the first time that Google announced to enter into e-commerce market. Google has realized the fact that it has missed the right timing to enter into e-commerce market, and its search engine and advertisement distribution business cannot help in this new field.

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Google Ads, First Drop in 16 Years

The outbreak of Covid-19, to some extent, has contributed to the development of e-commerce, as the lockdown policies have forced the stores to shift their businesses online. Sadly, unlike other competitors, Google doesn’t benefit from it.

As eMarketer estimated, Google’s advertising revenue will reach $39.6 billion, with a 5.3% drop compared with last year, where advertising revenue was $41.8 billion. Even though its advertising revenue is far higher than its competitor, Facebook and Amazon, its share in the U.S. e-advertising market reduced from 31.6% to 29.4%, which is the first decline since 2004.

Covid-19 has caused great damages to a large number of companies, especially to hotels and airlines. Even AirAsia, the largest budget airline in Malaysia plans to build its digital platform. And those companies were Google’s main advertisers. In the second quarter, Google’s advertisement revenue dropped by 8%, while its competitor Facebook and Amazon kept growing with the help of the booming e-commerce market. The growing rate of Facebook was 11%, and the growing rate of Amazon was 40%. Therefore, we can conclude that Google’s global leading search engine shows no advantages in e-commerce, even though we see a dramatic increased online shopping demand at the moment.


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